Richard G. Sheridan’s Richard Richard G. Sheridan’s FOLLOWFOLLOWFOLLOWFOLLOW THETHETHETHETHE FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW FOLLOW THE FOLLOW MONEYMONEYMONEYMONEYMONEY State Budgeting and Public Policy in Ohio MONEY MONEY MONEY MONEY MONEY MONEY MONEY MONEY MONEY MONEY Co-authored by Terry M. Thomas © 2019 by The Center for Community Solutions. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer, who may quote brief passages in a review. ISBN 978-0-578-43363-9 Contents Foreword . V Preface . VII . Part I: An Ohio Budget Primer . .1 . Chapter 1 The Legal Framework . 3 . Chapter 2 Taxes and Revenue Structure . 21 . Chapter 3 The Executive Budget . 45. Chapter 4 Budget Analysis . 73 Chapter 5 The Appropriations Process . 97 . Chapter 6 The Politics of Budgeting . 115 Chapter 7 Budget Execution and Oversight . 143 . Chapter 8 Budgetary Reform . 171. Part II: An Ohio Budget History . 187. Section 1 The First Century of Ohio Budgeting, 1910–2010 . 189 . Chapter 9 The Evolution of Modern Budgeting, 1910–1974 . 195 Chapter 10 Adapting to the New Normal, 1975–1998 . 205 . Chapter 11 Term Limits and Tax Cuts, 1999–2010 . .219 . Section 2 The Kasich Administration, 2011–2019 . 233. Chapter 12 Medicaid Funding and Policy . 237 . Chapter 13 Health and Human Services Funding and Policy . 255. Chapter 14 Education Funding and Policy . 283 Afterword An Uncertain Future . 307 Index . 311. III Foreword I remember the first time I heard Richard Sheridan describe the state budget at a Federation for Community Planning Human Services Institute . I was a 30-something human service advocate who knew next to nothing about the state budget nor how it was assembled . I was awed by his presenta- tion and encyclopedic knowledge . I learned that if you cared about state policy, then you needed to understand the state budget, and there was no better teacher than Dick Sheridan . As the first director of the Ohio’s Legislative Budget Office (LBO) during the 1970s, Dick led a non- partisan staff advising leaders of both parties through years of unprecedented expansion in social service provision . Then in the early 1980s, Dick joined the faculty of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University . Next he joined us, where for over a decade he shared his intellectual riches as an author of five books on state government and a statewide human services finance newsletter . In 1995, Dick was recruited back into state government as chief of the Division of Finance for State Auditor Jim Petro . Fast forward a few years and my predecessor John Begala recruited me to manage the public policy and advocacy work of The Center for Community Solutions . At the same time, he also recruited Dick to rejoin the Community Solutions staff as a regular writer and senior advisor . It meant that I was now Dick’s boss (to the extent anyone could be) . During this period, Dick authored comprehensive reports on state tax policy, a retrospective on the Taft administration and regular papers on all aspects of state finance and policy . Dick was the most prolific writer I’ve ever known . He could literally print out 3,000 pages of the state budget (typically breaking our copier in the process) on a Friday and return on Monday with a full- scale analysis . He was a brilliant story teller who often regaled me with tales of Statehouse intrigue . Dick spent a lot of time at his home in Lakewood, Ohio, which was packed full of treasures he had acquired from around the globe . Sadly, Dick passed way in 2009 . By demystifying the state budget process, Dick helped to level the legislative playing field for Ohio’s health and human service advocates . It’s in this spirit that Community Solutions decided to sup- port the publication of a fourth edition of Follow the Money . We could not have done this, though, without the continued assistance of one of Dick’s former colleagues, Terry Thomas, who lent his own extensive knowledge and experience to this endeavor . Terry has held senior leadership posts in both the executive and legislative branches of Ohio government and was the founding director for the V Ohio Association of Community Colleges . This book also includes chapters authored by my expert colleagues Tara Britton and Loren Anthes . Thanks to Terry, Tara and Loren’s efforts to preserve Follow the Money, Dick’s contributions to Ohio will not be forgotten, and a new generation of policy makers and advocates will have access to the history, information and data they need to help shape today’s better policy decisions for Ohio’s future . John R . Corlett President and Executive Director The Center for Community Solutions Foreword Preface The phrase “Follow the Money” was popularized in the 1976 motion picture All the President’s Men . The film suggested that a money trail existed within the Office of the President that was indicative of corruption at the highest level . The phrase has been used in a similar context recently, but also in a variety of circumstances over the intervening years when monetary influences have had a determi- native impact on political processes and fortunes . With this less sinister context in mind, the phrase became the title for this manuscript . Money and the budget process are extremely significant in Ohio state politics . The enactment of the biennial budget and public policy-making in Ohio are virtually indistinguishable . True, some important public policy actions occur outside the confines of the budget but less frequently than they happen inside . For this reason, we have added the phrase “Public Policy” to the title of the book in this edition . This Fourth Edition of Follow the Money explores state budgeting in Ohio from both a process and a historical perspective . This edition incorporates a greatly expanded budget history . In particular, it covers the administration of Governor John Kasich in considerable detail . The analysis dives deeply into the key public policy areas of Medicaid and other health and human services priorities as well as primary and secondary education, giving important context and life to the various elements of the budgetary process . The preparation of this edition of Follow the Money involved the efforts of many individuals aside from the editor . Particularly noteworthy are the contributions of staff from The Center for Community Solutions (CCS) . Loren Anthes authored the chapter on Medicaid funding and policy, and Tara Brit- ton did the same for the chapter on other health and human services priorities and provided overall direction to the project . Their detailed knowledge of these subject areas made it possible to expand the framework of the book beyond simply a description of budgetary process to a more substantive discussion of the public policy emanating from that process . A mentor of mine, William J . Shkurti, suggested this expanded purpose of Follow the Money, and I hope that we were able to accomplish his vision in this edition . Not to be overlooked are the steadfast support and contributions of other CCS staff members includ- ing President and Executive Director John Corlett, Dani Carlson, Rose Frech, Roslyn Bucy Kaleal, Sheila Lettsome, Brie Lusheck, Sam Sobul, William Tarter, Jr ., Kate Warren, and Adam White . In addi- tion, suggestions made by consultants Tom Zakrajsek of TOMZAK Design Inc . and Jennifer Chesak VII of Wandering in the Words Press greatly improved the look and readability of the final product, while WordCo Indexing Services, Inc . improved its usability . I am also appreciative of the valuable input of our external advisory group including John Begala, Maureen Corcoran, Tim Derickson, Gene Krebs, Justin Nigro, Brian Perera, Pari Sabety, Barbara Shaner, Carter Strang, Gayle Channing Tenenbaum, Marisa Weisel, and Chris Whistler . I also want to acknowledge the contributions of my spouse, Sheila Thomas, who carefully reviewed key portions of the text and made numerous recommendations to improve the product . She also assisted with many of the graphics . Her love and encouragement throughout the process was also very much appreciated, as was that of my adult children, Haley Lynn Thomas and Emily Detwiler, as well as Emily’s husband, Michael, and their son, Eli . Haley is also an author, and we bounced many ideas, joys, and frustrations off of each other . Finally, Dick Sheridan was my first supervisor in state government some four decades ago, and I continue to be inspired by his visionary leadership . His influence is reflected throughout this fourth edition of his seminal book . Terry M . Thomas Terry M . Thomas is an independent public policy consultant in the Columbus area . He has extensive experience in state government, including as senior budget analyst for the Ohio Legislative Service Commission and as president of the state Controlling Board while serv- ing as deputy director of the Ohio Office of Budget and Management . His public service also included tenures as assistant director and chief of staff at the Ohio Department of Develop- ment, assistant director of the Ohio Department of Job and Family Services, and associate vice chancellor at the Ohio Board of Regents . Terry was also the founding executive director of the Ohio Association of Community Colleges, and the association’s Friend of Community Colleges Award is named in his honor . He received his Bachelor of Arts Degree in Political Science from Penn State University with high honor and a Master of Arts Degree in the same field from The Ohio State University .